A crucial element of any business deal is due diligence. It’s not only a prudent course for entrepreneurs to follow, but it’s also demanded by lenders. To protect their own interests, they must know if an investment is correctly valued, safe from unforeseen costs and will generate sufficient revenue to repay debt and cover expenses. That’s not a guaranteed success formula, but in most cases, more information is better than less.

That standard, however, isn’t always respected in politics, as was the case last month when Duluth Economic Development Authority commissioners and Duluth city councilors voted to purchase the NorShor and Temple Opera block properties. Key elements of any standard real estate transaction – such as a professional valuation, environmental assessment and a business plan – were not available when commissioners and councilors were asked to approve the $2.6 million expenditure. Nonetheless, they advanced the purchase.

There’s a great desire citywide to preserve the NorShor building, which once was a stunning theater. With substantial investment, it may once again become a magnet that will attract business to Old Downtown. Yet, it’s a risky investment that might not prove sustainable without a long term infusion of tax dollars.

Sometimes, that’s justified – even quite desirable – if the overall benefit is substantial. In the case of the NorShor, that could be the case.

Nonetheless, the evidence so far is missing. Even worse, councilors were asked to meet deadlines that seemed artificial at best – designed only to suit the seller.

That’s no way to conduct business – particularly when tax dollars are involved. It’s admirable that city officials have great hopes for the NorShor, but they should be accompanied by solid information.

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